As the coronavirus death toll climbs, economies throughout the Asia Pacific are preparing for an impact greater than that of SARS.
With the death toll rapidly climbing above 1,000 – and several manufacturing hubs still under quarantine – China is bracing for a substantial COVID-19 hit. While the country is still aiming to fulfill its goal of being a “Xiaokang” society – one with a functional middle class – in time for the centenary of the Communist Party of China in 2021, the outbreak of COVID-19 could throw that objective out, with some commentators predicting that the virus could shave up to 2 per cent from the country’s already slowing GDP growth this year.
Finance Minister Liu Kang has promised to cut or reduce corporate taxes – particularly for those businesses involved in manufacturing, construction, and transportation – and taxes for businesses involved in fighting the outbreak of COVID-19. China will also continue to focus on “promoting high-quality development, encouraging technological innovation, attracting high-end talent, and promoting export growth”.
But China isn’t the only country that has been hit hard by the virus outbreak. According to Hong Kong’s Financial Secretary, the city-state is facing down “tsunami-like shocks” that could cause unemployment to spiral. Hong Kong was already suffering due to the impact that widespread protests had on its retail, catering and tourism sectors last year, and the fiscal deficit for 2020/2021 may be the highest ever.
Singapore is also predicting a 30 per cent fall in visitors, while Macau has had to shutter its casinos to clamp down on the spread of COVID-19.